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FIRST DIVISION

[G.R. No. 164156. September 26, 2006.]

ABS-CBN BROADCASTING CORPORATION, petitioner, vs. MARLYN NAZARENO,


MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, respondents.

DECISION

CALLEJO, SR., J p:

Before us is a petition for review on certiorari of the Decision 1 of the Court of


Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying the motion for
reconsideration thereof. The CA affirmed the Decision 2 and Resolution 3 of the
National Labor Relations Commission (NLRC) in NLRC Case No. V-000762-2001 (RAB
Case No. VII-10-1661-2001) which likewise affirmed, with modification, the decision
of the Labor Arbiter declaring the respondents Marlyn Nazareno, Merlou Gerzon,
Jennifer Deiparine and Josephine Lerasan as regular employees. DAEcIS

The Antecedents

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the


broadcasting business and owns a network of television and radio stations, whose
operations revolve around the broadcast, transmission, and relay of
telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
generates from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and authority to operate
by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as


production assistants (PAs) on different dates. They were assigned at the news and
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
monthly compensation of P4,000. They were issued ABS-CBN employees'
identification cards and were required to work for a minimum of eight hours a day,
including Sundays and holidays. They were made to perform the following tasks and
duties:

a) Prepare, arrange airing of commercial broadcasting based on the daily


operations log and digicart of respondent ABS-CBN;

b) Coordinate, arrange personalities for air interviews;

c) Coordinate, prepare schedule of reporters for scheduled news reporting and


lead-in or incoming reports;

d) Facilitate, prepare and arrange airtime schedule for public service


announcement and complaints;

e) Assist, anchor program interview, etc; and

f) Record, log clerical reports, man based control radio. 4

Their respective working hours were as follows:


Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7 1/2

8:00 A.M.-12:00 noon

2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 1/2

3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.

9:00 A.M.-6:00 P.M. (WF) 9 hrs.

4. Merlou Gerzon 9:00 A.M.-6:00 P.M.9 hrs. 5

The PAs were under the control and supervision of Assistant Station Manager Dante
J. Luzon, and News Manager Leo Lastimosa.

On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees


executed a Collective Bargaining Agreement (CBA) to be effective during the period
from December 11, 1996 to December 11, 1999. However, since petitioner refused
to recognize PAs as part of the bargaining unit, respondents were not included to
the CBA. 6

On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing
the PAs that effective August 1, 2000, they would be assigned to non-drama
programs, and that the DYAB studio operations would be handled by the studio
technician. Thus, their revised schedule and other assignments would be as follows:

Monday-Saturday

4:30 A.M.-8:00 A.M.-Marlene Nazareno.

Miss Nazareno will then be assigned at the Research Dept.

From 8:00 A.M. to 12:00

4:30 P.M.-12:00 MN-Jennifer Deiparine

Sunday

5:00 A.M.-1:00 P.M.-Jennifer Deiparine

1:00 P.M.-10:00 P.M.-Joy Sanchez

Respondent Gerzon was assigned as the full-time PA of the TV News Department


reporting directly to Leo Lastimosa.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular


Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay,
Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against
the petitioner before the NLRC. The Labor Arbiter directed the parties to submit
their respective position papers. Upon respondents' failure to file their position
papers within the reglementary period, Labor Arbiter Jose G. Gutierrez issued an
Order dated April 30, 2001, dismissing the complaint without prejudice for lack of
interest to pursue the case. Respondents received a copy of the Order on May 16,
2001. 7 Instead of re-filing their complaint with the NLRC within 10 days from May
16, 2001, they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with
Motion to Admit Position Paper and Motion to Submit Case For Resolution. 8 The
Labor Arbiter granted this motion in an Order dated June 18, 2001, and forthwith
admitted the position paper of the complainants. Respondents made the following
allegations:

1. Complainants were engaged by respondent ABS-CBN as regular and full-time


employees for a continuous period of more than five (5) years with a monthly salary
rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this
complaint on November 20, 2000. DaAIHC

Machine copies of complainants' ABS-CBN Employee's Identification Card and salary


vouchers are hereto attached as follows, thus:

I. Jennifer Deiparine:

Exhibit "A" - ABS-CBN Employee's Identification Card

Exhibit "B", - ABS-CBN Salary Voucher from Nov.

Exhibit "B-1" & 1999 to July 2000 at P4,000.00

Exhibit "B-2"

Date employed: September 15, 1995

Length of service: 5 years & nine (9) months

II. Merlou Gerzon - ABS-CBN Employee's Identification Card

Exhibit "C"

Exhibit "D"

Exhibit "D-1" &

Exhibit "D-2" - ABS-CBN Salary Voucher from March

1999 to January 2001 at P4,000.00

Date employed: September 1, 1995

Length of service: 5 years & 10 months

III. Marlene Nazareno

Exhibit "E" - ABS-CBN Employee's Identification Card

Exhibit "E" - ABS-CBN Salary Voucher from Nov.

Exhibit "E-1" & 1999 to December 2000

Exhibit :E-2"
Date employed: April 17, 1996

Length of service: 5 years and one (1) month

IV. Joy Sanchez Lerasan

Exhibit "F" - ABS-CBN Employee's Identification Card

Exhibit "F-1" - ABS-CBN Salary Voucher from Aug.

Exhibit "F-2" & 2000 to Jan. 2001

Exhibit "F-3"

Exhibit "F-4" - Certification dated July 6, 2000

Acknowledging regular status of

Complainant Joy Sanchez Lerasan

Signed by ABS-CBN Administrative

Officer May Kima Hife

Date employed: April 15, 1998

Length of service: 3 yrs. and one (1) month 9

Respondents insisted that they belonged to a "work pool" from which petitioner
chose persons to be given specific assignments at its discretion, and were thus
under its direct supervision and control regardless of nomenclature. They prayed
that judgment be rendered in their favor, thus:

WHEREFORE, premises considered, this Honorable Arbiter is most respectfully


prayed, to issue an order compelling defendants to pay complainants the following:

1. One Hundred Thousand Pesos (P100,000.00) each and by way of moral


damages;

2. Minimum wage differential;

3. Thirteenth month pay differential;

4. Unpaid service incentive leave benefits;

5. Sick leave;

6. Holiday pay;

7. Premium pay;

8. Overtime pay;

9. Night shift differential.


Complainants further pray of this Arbiter to declare them regular and permanent
employees of respondent ABS-CBN as a condition precedent for their admission into
the existing union and collective bargaining unit of respondent company where they
may as such acquire or otherwise perform their obligations thereto or enjoy the
benefits due therefrom. cADaIH

Complainants pray for such other reliefs as are just and equitable under the
premises. 10

For its part, petitioner alleged in its position paper that the respondents were PAs
who basically assist in the conduct of a particular program ran by an anchor or
talent. Among their duties include monitoring and receiving incoming calls from
listeners and field reporters and calls of news sources; generally, they perform leg
work for the anchors during a program or a particular production. They are
considered in the industry as "program employees" in that, as distinguished from
regular or station employees, they are basically engaged by the station for a
particular or specific program broadcasted by the radio station. Petitioner asserted
that as PAs, the complainants were issued talent information sheets which are
updated from time to time, and are thus made the basis to determine the programs
to which they shall later be called on to assist. The program assignments of
complainants were as follows:

a. Complainant Nazareno assists in the programs:

1) Nagbagang Balita (early morning edition)

2) Infor Hayupan

3) Arangkada (morning edition)

4) Nagbagang Balita (mid-day edition)

b. Complainant Deiparine assists in the programs:

1) Unzanith

2) Serbisyo de Arevalo

3) Arangkada (evening edition)

4) Balitang K (local version)

5) Abante Subu

6) Pangutana Lang

c. Complainant Gerzon assists in the program:

1) On Mondays and Tuesdays:

(a) Unzanith

(b) Serbisyo de Arevalo


(c) Arangkada (evening edition)

(d) Balitang K (local version)

(e) Abante Sugbu

(f) Pangutana Lang

2) On Thursdays

Nagbagang Balita

3) On Saturdays

(a) Nagbagang Balita

(b) Info Hayupan

(c) Arangkada (morning edition)

(d) Nagbagang Balita (mid-day edition)

4) On Sundays:

(a) Siesta Serenata

(b) Sunday Chismisan

(c) Timbangan sa Hustisya

(d) Sayri ang Lungsod

(e) Haranahan 11

Petitioner maintained that PAs, reporters, anchors and talents occasionally


"sideline" for other programs they produce, such as drama talents in other
productions. As program employees, a PA's engagement is coterminous with the
completion of the program, and may be extended/renewed provided that the
program is on-going; a PA may also be assigned to new programs upon the
cancellation of one program and the commencement of another. As such program
employees, their compensation is computed on a program basis, a fixed amount for
performance services irrespective of the time consumed. At any rate, petitioner
claimed, as the payroll will show, respondents were paid all salaries and benefits
due them under the law. 12

Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA
and interpret the same, especially since respondents were not covered by the
bargaining unit. ADaSEH

On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents,
and declared that they were regular employees of petitioner; as such, they were
awarded monetary benefits. The fallo of the decision reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered


declaring the complainants regular employees of the respondent ABS-CBN
Broadcasting Corporation and directing the same respondent to pay complainants
as follows:

I - Merlou A. Gerzon P12,025.00

II - Marlyn Nazareno 12,025.00

III - Jennifer Deiparine 12,025.00

IV - Josephine Sanchez Lerazan 12,025.00

–––––––––

P48,100.00

plus ten (10%) percent Attorney's Fees or a TOTAL aggregate amount of PESOS:
FIFTY TWO THOUSAND NINE HUNDRED TEN (P52,910.00).

Respondent Veneranda C. Sy is absolved from any liability.

SO ORDERED. 13

However, the Labor Arbiter did not award money benefits as provided in the CBA on
his belief that he had no jurisdiction to interpret and apply the agreement, as the
same was within the jurisdiction of the Voluntary Arbitrator as provided in Article
261 of the Labor Code.

Respondents' counsel received a copy of the decision on August 29, 2001.


Respondent Nazareno received her copy on August 27, 2001, while the other
respondents received theirs on September 8, 2001. Respondents signed and filed
their Appeal Memorandum on September 18, 2001.

For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter
denied and considered as an appeal, conformably with Section 5, Rule V, of the
NLRC Rules of Procedure. Petitioner forthwith appealed the decision to the NLRC,
while respondents filed a partial appeal.

In its appeal, petitioner alleged the following:

1. That the Labor Arbiter erred in reviving or re-opening this case which had
long been dismissed without prejudice for more than thirty (30) calendar days;

2. That the Labor Arbiter erred in depriving the respondent of its Constitutional
right to due process of law;

3. That the Labor Arbiter erred in denying respondent's Motion for


Reconsideration on an interlocutory order on the ground that the same is a
prohibited pleading;

4. That the Labor Arbiter erred when he ruled that the complainants are regular
employees of the respondent;

5. That the Labor Arbiter erred when he ruled that the complainants are entitled
to 13th month pay, service incentive leave pay and salary differential; and
6. That the Labor Arbiter erred when he ruled that complainants are entitled to
attorney's fees. 14

On November 14, 2002, the NLRC rendered judgment modifying the decision of the
Labor Arbiter. The fallo of the decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez


dated 30 July 2001 is SET ASIDE and VACATED and a new one is entered ORDERING
respondent ABS-CBN Broadcasting Corporation, as follows:

1. To pay complainants of their wage differentials and other benefits arising


from the CBA as of 30 September 2002 in the aggregate amount of Two Million Five
Hundred, Sixty-One Thousand Nine Hundred Forty-Eight Pesos and 22/100
(P2,561,948.22), broken down as follows:

a. Deiparine, Jennifer - P716,113.49

b. Gerzon, Merlou - 716,113.49

c. Nazareno, Marlyn - 716,113.49

d. Lerazan, Josephine Sanchez - 413,607.75

––––––––––––

Total - P2,561,948.22

2. To deliver to the complainants Two Hundred Thirty-Three (233) sacks of rice


as of 30 September 2002 representing their rice subsidy in the CBA, broken down
as follows:

a. Deiparine, Jennifer - 60 Sacks

b. Gerzon, Merlou - 60 Sacks

c. Nazareno, Marlyn - 60 Sacks

d. Lerazan, Josephine Sanchez - 53 Sacks

–––––––

Total 233 Sacks; and

3. To grant to the complainants all the benefits of the CBA after 30 September
2002.

SO ORDERED. 15

The NLRC declared that the Labor Arbiter acted conformably with the Labor Code
when it granted respondents' motion to refile the complaint and admit their position
paper. Although respondents were not parties to the CBA between petitioner and
the ABS-CBN Rank-and-File Employees Union, the NLRC nevertheless granted and
computed respondents' monetary benefits based on the 1999 CBA, which was
effective until September 2002. The NLRC also ruled that the Labor Arbiter had
jurisdiction over the complaint of respondents because they acted in their individual
capacities and not as members of the union. Their claim for monetary benefits was
within the context of Article 217(6) of the Labor Code. The validity of respondents'
claim does not depend upon the interpretation of the CBA. CIAcSa

The NLRC ruled that respondents were entitled to the benefits under the CBA
because they were regular employees who contributed to the profits of petitioner
through their labor. The NLRC cited the ruling of this Court in New Pacific Timber &
Supply Company v. National Labor Relations Commission. 16

Petitioner filed a motion for reconsideration, which the NLRC denied.

Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA, raising both procedural and substantive issues, as follows: (a)
whether the NLRC acted without jurisdiction in admitting the appeal of respondents;
(b) whether the NLRC committed palpable error in scrutinizing the reopening and
revival of the complaint of respondents with the Labor Arbiter upon due notice
despite the lapse of 10 days from their receipt of the July 30, 2001 Order of the
Labor Arbiter; (c) whether respondents were regular employees; (d) whether the
NLRC acted without jurisdiction in entertaining and resolving the claim of the
respondents under the CBA instead of referring the same to the Voluntary
Arbitrators as provided in the CBA; and (e) whether the NLRC acted with grave
abuse of discretion when it awarded monetary benefits to respondents under the
CBA although they are not members of the appropriate bargaining unit.

On February 10, 2004, the CA rendered judgment dismissing the petition. It held
that the perfection of an appeal shall be upon the expiration of the last day to
appeal by all parties, should there be several parties to a case. Since respondents
received their copies of the decision on September 8, 2001 (except respondent
Nazareno who received her copy of the decision on August 27, 2001), they had until
September 18, 2001 within which to file their Appeal Memorandum. Moreover, the
CA declared that respondents' failure to submit their position paper on time is not a
ground to strike out the paper from the records, much less dismiss a complaint.

Anent the substantive issues, the appellate court stated that respondents are not
mere project employees, but regular employees who perform tasks necessary and
desirable in the usual trade and business of petitioner and not just its project
employees. Moreover, the CA added, the award of benefits accorded to rank-and-file
employees under the 1996-1999 CBA is a necessary consequence of the NLRC
ruling that respondents, as PAs, are regular employees.

Finding no merit in petitioner's motion for reconsideration, the CA denied the same
in a Resolution 17 dated June 16, 2004.

Petitioner thus filed the instant petition for review on certiorari and raises the
following assignments of error:

1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND


GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION
NOTWITHSTANDING THE PATENT NULLITY OF THE LATTER'S DECISION AND
RESOLUTION.
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE
RULING OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.

3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE


RULING OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS. 18

Considering that the assignments of error are interrelated, the Court shall resolve
them simultaneously.

Petitioner asserts that the appellate court committed palpable and serious error of
law when it affirmed the rulings of the NLRC, and entertained respondents' appeal
from the decision of the Labor Arbiter despite the admitted lapse of the
reglementary period within which to perfect the same. Petitioner likewise maintains
that the 10-day period to appeal must be reckoned from receipt of a party's
counsel, not from the time the party learns of the decision, that is, notice to counsel
is notice to party and not the other way around. Finally, petitioner argues that the
reopening of a complaint which the Labor Arbiter has dismissed without prejudice is
a clear violation of Section 1, Rule V of the NLRC Rules; such order of dismissal had
already attained finality and can no longer be set aside. TaCDAH

Respondents, on the other hand, allege that their late appeal is a non-issue because
it was petitioner's own timely appeal that empowered the NLRC to reopen the case.
They assert that although the appeal was filed 10 days late, it may still be given
due course in the interest of substantial justice as an exception to the general rule
that the negligence of a counsel binds the client. On the issue of the late filing of
their position paper, they maintain that this is not a ground to strike it out from the
records or dismiss the complaint.

We find no merit in the petition.

We agree with petitioner's contention that the perfection of an appeal within the
statutory or reglementary period is not only mandatory, but also jurisdictional;
failure to do so renders the assailed decision final and executory and deprives the
appellate court or body of the legal authority to alter the final judgment, much less
entertain the appeal. However, this Court has time and again ruled that in
exceptional cases, a belated appeal may be given due course if greater injustice
may occur if an appeal is not given due course than if the reglementary period to
appeal were strictly followed. 19 The Court resorted to this extraordinary measure
even at the expense of sacrificing order and efficiency if only to serve the greater
principles of substantial justice and equity. 20

In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving
Article 223 21 of the Labor Code a liberal application to prevent the miscarriage of
justice. Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. 22 We have held in a
catena of cases that technical rules are not binding in labor cases and are not to be
applied strictly if the result would be detrimental to the workingman. 23

Admittedly, respondents failed to perfect their appeal from the decision of the Labor
Arbiter within the reglementary period therefor. However, petitioner perfected its
appeal within the period, and since petitioner had filed a timely appeal, the NLRC
acquired jurisdiction over the case to give due course to its appeal and render the
decision of November 14, 2002. Case law is that the party who failed to appeal from
the decision of the Labor Arbiter to the NLRC can still participate in a separate
appeal timely filed by the adverse party as the situation is considered to be of
greater benefit to both parties. 24

We find no merit in petitioner's contention that the Labor Arbiter abused his
discretion when he admitted respondents' position paper which had been belatedly
filed. It bears stressing that the Labor Arbiter is mandated by law to use every
reasonable means to ascertain the facts in each case speedily and objectively,
without technicalities of law or procedure, all in the interest of due process. 25
Indeed, as stressed by the appellate court, respondents' failure to submit a position
paper on time is not a ground for striking out the paper from the records, much less
for dismissing a complaint. 26 Likewise, there is simply no truth to petitioner's
assertion that it was denied due process when the Labor Arbiter admitted
respondents' position paper without requiring it to file a comment before admitting
said position paper. The essence of due process in administrative proceedings is
simply an opportunity to explain one's side or an opportunity to seek
reconsideration of the action or ruling complained of. Obviously, there is nothing in
the records that would suggest that petitioner had absolute lack of opportunity to
be heard. 27 Petitioner had the right to file a motion for reconsideration of the Labor
Arbiter's admission of respondents' position paper, and even file a Reply thereto. In
fact, petitioner filed its position paper on April 2, 2001. It must be stressed that
Article 280 of the Labor Code was encoded in our statute books to hinder the
circumvention by unscrupulous employers of the employees' right to security of
tenure by indiscriminately and absolutely ruling out all written and oral agreements
inharmonious with the concept of regular employment defined therein. 28

We quote with approval the following pronouncement of the NLRC:

The complainants, on the other hand, contend that respondents assailed the Labor
Arbiter's order dated 18 June 2001 as violative of the NLRC Rules of Procedure and
as such is violative of their right to procedural due process. That while suggesting
that an Order be instead issued by the Labor Arbiter for complainants to refile this
case, respondents impliedly submit that there is not any substantial damage or
prejudice upon the refiling, even so, respondents' suggestion acknowledges
complainants right to prosecute this case, albeit with the burden of repeating the
same procedure, thus, entailing additional time, efforts, litigation cost and precious
time for the Arbiter to repeat the same process twice. Respondent's suggestion,
betrays its notion of prolonging, rather than promoting the early resolution of the
case. ECaAHS

Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-
opened the dismissed case without prejudice beyond the ten (10) day reglementary
period had inadvertently failed to follow Section 16, Rule V, Rules Procedure of the
NLRC which states:

"A party may file a motion to revive or re-open a case dismissed without prejudice
within ten (10) calendar days from receipt of notice of the order dismissing the
same; otherwise, his only remedy shall be to re-file the case in the arbitration
branch of origin."
the same is not a serious flaw that had prejudiced the respondents' right to due
process. The case can still be refiled because it has not yet prescribed. Anyway,
Article 221 of the Labor Code provides:

"In any proceedings before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the
spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process."

The admission by the Labor Arbiter of the complainants' Position Paper and
Supplemental Manifestation which were belatedly filed just only shows that he
acted within his discretion as he is enjoined by law to use every reasonable means
to ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process. Indeed, the
failure to submit a position paper on time is not a ground for striking out the paper
from the records, much less for dismissing a complaint in the case of the
complainant. (University of Immaculate Conception vs. UIC Teaching and Non-
Teaching Personnel Employees, G.R. No. 144702, July 31, 2001).

"In admitting the respondents' position paper albeit late, the Labor Arbiter acted
within her discretion. In fact, she is enjoined by law to use every reasonable means
to ascertain the facts in each case speedily and objectively, without technicalities of
law or procedure, all in the interest of due process". (Panlilio vs. NLRC, 281 SCRA
53).

The respondents were given by the Labor Arbiter the opportunity to submit position
paper. In fact, the respondents had filed their position paper on 2 April 2001. What
is material in the compliance of due process is the fact that the parties are given
the opportunities to submit position papers.

"Due process requirements are satisfied where the parties are given the
opportunities to submit position papers". (Laurence vs. NLRC, 205 SCRA 737).

Thus, the respondent was not deprived of its Constitutional right to due process of
law. 29

We reject, as barren of factual basis, petitioner's contention that respondents are


considered as its talents, hence, not regular employees of the broadcasting
company. Petitioner's claim that the functions performed by the respondents are
not at all necessary, desirable, or even vital to its trade or business is belied by the
evidence on record.

Case law is that this Court has always accorded respect and finality to the findings
of fact of the CA, particularly if they coincide with those of the Labor Arbiter and the
National Labor Relations Commission, when supported by substantial evidence. 30
The question of whether respondents are regular or project employees or
independent contractors is essentially factual in nature; nonetheless, the Court is
constrained to resolve it due to its tremendous effects to the legions of production
assistants working in the Philippine broadcasting industry.
We agree with respondents' contention that where a person has rendered at least
one year of service, regardless of the nature of the activity performed, or where the
work is continuous or intermittent, the employment is considered regular as long as
the activity exists, the reason being that a customary appointment is not
indispensable before one may be formally declared as having attained regular
status. Article 280 of the Labor Code provides:

ART. 280. REGULAR AND CASUAL EMPLOYMENT. — The provisions of written


agreement to the contrary notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer except where the employment has been
fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is for
the duration of the season. AHaETS

In Universal Robina Corporation v. Catapang, 31 the Court reiterated the test in


determining whether one is a regular employee:

The primary standard, therefore, of determining regular employment is the


reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also, if the employee has been performing the job for at least a year, even
if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while
such activity exists. 32

As elaborated by this Court in Magsalin v. National Organization of Working Men: 33

Even while the language of law might have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a "regular" worker'’s security of tenure, however,
can hardly be doubted. In determining whether an employment should be
considered regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual
business or trade of the employer. The standard, supplied by the law itself, is
whether the work undertaken is necessary or desirable in the usual business or
trade of the employer, a fact that can be assessed by looking into the nature of the
services rendered and its relation to the general scheme under which the business
or trade is pursued in the usual course. It is distinguished from a specific
undertaking that is divorced from the normal activities required in carrying on the
particular business or trade. But, although the work to be performed is only for a
specific project or seasonal, where a person thus engaged has been performing the
job for at least one year, even if the performance is not continuous or is merely
intermittent, the law deems the repeated and continuing need for its performance
as being sufficient to indicate the necessity or desirability of that activity to the
business or trade of the employer. The employment of such person is also then
deemed to be regular with respect to such activity and while such activity exists. 34

Not considered regular employees are "project employees," the completion or


termination of which is more or less determinable at the time of employment, such
as those employed in connection with a particular construction project, and
"seasonal employees" whose employment by its nature is only desirable for a
limited period of time. Even then, any employee who has rendered at least one year
of service, whether continuous or intermittent, is deemed regular with respect to
the activity performed and while such activity actually exists.

It is of no moment that petitioner hired respondents as "talents." The fact that


respondents received pre-agreed "talent fees" instead of salaries, that they did not
observe the required office hours, and that they were permitted to join other
productions during their free time are not conclusive of the nature of their
employment. Respondents cannot be considered "talents" because they are not
actors or actresses or radio specialists or mere clerks or utility employees. They are
regular employees who perform several different duties under the control and
direction of ABS-CBN executives and supervisors.

Thus, there are two kinds of regular employees under the law: (1) those engaged to
perform activities which are necessary or desirable in the usual business or trade of
the employer; and (2) those casual employees who have rendered at least one year
of service, whether continuous or broken, with respect to the activities in which they
are employed. 35

The law overrides such conditions which are prejudicial to the interest of the worker
whose weak bargaining situation necessitates the succor of the State. What
determines whether a certain employment is regular or otherwise is not the will or
word of the employer, to which the worker oftentimes acquiesces, much less the
procedure of hiring the employee or the manner of paying the salary or the actual
time spent at work. It is the character of the activities performed in relation to the
particular trade or business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued existence. 36 It is
obvious that one year after they were employed by petitioner, respondents became
regular employees by operation of law. 37

Additionally, respondents cannot be considered as project or program employees


because no evidence was presented to show that the duration and scope of the
project were determined or specified at the time of their engagement. Under
existing jurisprudence, project could refer to two distinguishable types of activities.
First, a project may refer to a particular job or undertaking that is within the regular
or usual business of the employer, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times. Second, the
term project may also refer to a particular job or undertaking that is not within the
regular business of the employer. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or regular business operations of
the employer. The job or undertaking also begins and ends at determined or
determinable times. 38
The principal test is whether or not the project employees were assigned to carry
out a specific project or undertaking, the duration and scope of which were
specified at the time the employees were engaged for that project. 39

In this case, it is undisputed that respondents had continuously performed the same
activities for an average of five years. Their assigned tasks are necessary or
desirable in the usual business or trade of the petitioner. The persisting need for
their services is sufficient evidence of the necessity and indispensability of such
services to petitioner's business or trade. 40 While length of time may not be a sole
controlling test for project employment, it can be a strong factor to determine
whether the employee was hired for a specific undertaking or in fact tasked to
perform functions which are vital, necessary and indispensable to the usual trade or
business of the employer. 41 We note further that petitioner did not report the
termination of respondents' employment in the particular "project" to the
Department of Labor and Employment Regional Office having jurisdiction over the
workplace within 30 days following the date of their separation from work, using the
prescribed form on employees' termination/dismissals/suspensions. 42

As gleaned from the records of this case, petitioner itself is not certain how to
categorize respondents. In its earlier pleadings, petitioner classified respondents as
program employees, and in later pleadings, independent contractors. Program
employees, or project employees, are different from independent contractors
because in the case of the latter, no employer-employee relationship exists.

Petitioner's reliance on the ruling of this Court in Sonza v. ABS-CBN Broadcasting


Corporation 43 is misplaced. In that case, the Court explained why Jose Sonza, a
well-known television and radio personality, was an independent contractor and not
a regular employee:

A. Selection and Engagement of Employee

ABS-CBN engaged SONZA'S services to co-host its television and radio programs
because of SONZA'S peculiar skills, talent and celebrity status. SONZA contends
that the "discretion used by respondent in specifically selecting and hiring
complainant over other broadcasters of possibly similar experience and qualification
as complainant belies respondent's claim of independent contractorship." acHDTE

Independent contractors often present themselves to possess unique skills,


expertise or talent to distinguish them from ordinary employees. The specific
selection and hiring of SONZA, because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. If SONZA did not possess
such unique skills, talent and celebrity status, ABS-CBN would not have entered into
the Agreement with SONZA but would have hired him through its personnel
department just like any other employee.

In any event, the method of selecting and engaging SONZA does not conclusively
determine his status. We must consider all the circumstances of the relationship,
with the control test being the most important element.

B. Payment of Wages
ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going
to MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits
and privileges "which he would not have enjoyed if he were truly the subject of a
valid job contract."

All the talent fees and benefits paid to SONZA were the result of negotiations that
led to the Agreement. If SONZA were ABS-CBN's employee, there would be no need
for the parties to stipulate on benefits such as "SSS, Medicare, . . . and 13th month
pay which the law automatically incorporates into every employer-employee
contract. Whatever benefits SONZA enjoyed arose from contract and not because of
an employer-employee relationship.

SONZA's talent fees, amounting to P317,000 monthly in the second and third year,
are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than an employer-employee relationship. ABS-CBN
agreed to pay SONZA such huge talent fees precisely because of SONZA'S unique
skills, talent and celebrity status not possessed by ordinary employees. Obviously,
SONZA acting alone possessed enough bargaining power to demand and receive
such huge talent fees for his services. The power to bargain talent fees way above
the salary scales of ordinary employees is a circumstance indicative, but not
conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate
the status of SONZA as an independent contractor. The parties expressly agreed on
such mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to
whom MJMDC would have to turn over any talent fee accruing under the Agreement.
44

In the case at bar, however, the employer-employee relationship between petitioner


and respondents has been proven.

First. In the selection and engagement of respondents, no peculiar or unique skill,


talent or celebrity status was required from them because they were merely hired
through petitioner's personnel department just like any ordinary employee.

Second. The so-called "talent fees" of respondents correspond to wages given as a


result of an employer-employee relationship. Respondents did not have the power
to bargain for huge talent fees, a circumstance negating independent contractual
relationship.

Third. Petitioner could always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the petitioner for
continued work.

Fourth. The degree of control and supervision exercised by petitioner over


respondents through its supervisors negates the allegation that respondents are
independent contractors.

The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not
furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor. 45 The Court will
peruse beyond any such agreement to examine the facts that typify the parties'
actual relationship. 46

It follows then that respondents are entitled to the benefits provided for in the
existing CBA between petitioner and its rank-and-file employees. As regular
employees, respondents are entitled to the benefits granted to all other regular
employees of petitioner under the CBA. 47 We quote with approval the ruling of the
appellate court, that the reason why production assistants were excluded from the
CBA is precisely because they were erroneously classified and treated as project
employees by petitioner:

. . . The award in favor of private respondents of the benefits accorded to rank-and-


file employees of ABS-CBN under the 1996-1999 CBA is a necessary consequence of
public respondent's ruling that private respondents as production assistants of
petitioner are regular employees. The monetary award is not considered as claims
involving the interpretation or implementation of the collective bargaining
agreement. The reason why production assistants were excluded from the said
agreement is precisely because they were classified and treated as project
employees by petitioner. DCISAE

As earlier stated, it is not the will or word of the employer which determines the
nature of employment of an employee but the nature of the activities performed by
such employee in relation to the particular business or trade of the employer.
Considering that We have clearly found that private respondents are regular
employees of petitioner, their exclusion from the said CBA on the misplaced belief
of the parties to the said agreement that they are project employees, is therefore
not proper. Finding said private respondents as regular employees and not as mere
project employees, they must be accorded the benefits due under the said
Collective Bargaining Agreement.

A collective bargaining agreement is a contract entered into by the union


representing the employees and the employer. However, even the non-member
employees are entitled to the benefits of the contract. To accord its benefits only to
members of the union without any valid reason would constitute undue
discrimination against non-members. A collective bargaining agreement is binding
on all employees of the company. Therefore, whatever benefits are given to the
other employees of ABS-CBN must likewise be accorded to private respondents who
were regular employees of petitioner. 48

Besides, only talent-artists were excluded from the CBA and not production
assistants who are regular employees of the respondents. Moreover, under Article
1702 of the New Civil Code: "In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living of the laborer."

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582
are AFFIRMED. Costs against petitioner. CTSAaH

SO ORDERED.

Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.